Mideast airlines top global passenger demand in Aug

Geneva, October 2, 2013

Middle East carriers had the strongest year-over-year traffic growth at 15.1 per cent in August, a trend which will continue with solid progress in non-oil producing sectors in countries such as Saudi Arabia and the UAE, a report said.

The result was positively biased from the timing of Ramadan, which occurred a month earlier (in July) in 2013, added the report from the International Air Transport Association (Iata) revealing global passenger traffic results for August.

Capacity expansion was held to 10.8 per cent which pushed up load factor 3.1 percentage points to 82.0 per cent.

African airlines’ traffic climbed 5.4 per cent compared to August 2012 while capacity rose 6.5 per cent, resulting in a 0.7 percentage point dip in load factor to 70.9 per cent. Africa was the only region to see a decline in the load factor.

August international passenger demand was up 7.5 per cent compared to the year-ago period. Capacity rose 5.6 per cent versus August 2012 and load factor climbed 1.5 percentage points to 84.0 per cent. All regions recorded year-over-year increases in demand.

Total revenue passenger kilometers (RPKs) rose 6.8 per cent compared to August 2012. Capacity increases over the year-ago period lagged demand at 5.6 per cent. This pushed the load factor to match the record high of 83.4 per cent set in July 2011, the report said.

“August was a positive month for passenger travel. Strong demand and capacity discipline saw load factors match the previous record high of 83.4 per cent,” explained Tony Tyler, Iata’s director general and CEO.

“The solid performance was also supported by a stabilization of emerging market weakness and renewed confidence in Europe and North America. Trading conditions are still tough with high oil prices, stiff competition and regulatory hurdles. But demand growth remains a bright spot with most indications pointing towards an acceleration in the fourth quarter.”

The growth in demand for passenger travel highlights the important role that global connectivity plays in today’s world, the report said.

“Aviation is the lifeblood of the global economy. It’s important for jobs and development that aviation’s growth is sustainable. That’s equally critical for its financial and environmental performance,” said Tyler.

“Last week we announced a revised industry outlook. Profits are weak, but moving in the right direction. In 2012 airlines made an average 1.1 per cent net profit margin. That is expected to double to 2.2 per cent in 2014. Cost control, consolidation, joint ventures and product innovations are among the measures that are helping airlines achieve the efficiencies needed to secure their financial futures,” said Tyler.

“This week we have a golden opportunity to secure a major step forward on environmental sustainability at the 38th Assembly of the International Civil Aviation Organization (ICAO). It is critical that the Assembly agree a way forward on a single market-based measure (MBM) to support the shared commitment of industry and governments to carbon-neutral growth from 2020.

“Interim regional schemes will only serve to distract policymakers and the industry at a time when we should be focused on the big picture. Finding a way forward on a global mechanism will be an historic achievement that keeps aviation at the forefront of industries managing their climate change impact,” Tyler concluded. – TradeArabia News Service